Aug 24, 2025
The Data Center Power Crisis: America at a Crossroads
The introduction of the public internet could go down in history as the most profound tech innovation the world has ever seen. It has proved more transformative than the automobile, spaceflight, and perhaps even nuclear energy. But we now find ourselves at a crossroads involving data centers and our ability to sufficiently power them.
Data Center Operators Are Concerned
Those of us in the power generation industry have been sounding the alarm over data centers for years. We know how much power they consume. We also know what the nation’s total power generation capacity is. Here is the problem: the numbers don't add up.
Until recently, the data center industry has been less concerned. But things are changing. Surveys taken over the last couple of years demonstrate that operators are now concerned. Three potential problems are on their radar:
Rising costs
Power constraints
Demand forecasting
To me, the most telling statistic is that 36% of America's data center operators are very concerned about power constraints. In simple English, they are worried that the grid will not be able to continue supplying them with enough power to do what they do.
Big Data, the IoT, and AI
The energy industry's concerns over data power consumption began more than a decade ago. As Big Data became a thing, we could see problems on the horizon. The Big Data concept lends itself very well to excess power consumption at the server level. Big Data needs electricity.
The introduction of Big Data was followed by the development of the IoT (internet of things). Thanks to the IoT, we can all be interconnected on multiple levels. Everything from cell phones to smart appliances to the navigation systems in our cars relies on an IoT powered by energy-consuming data centers.
More than 25 years after the introduction of the public internet, we have entered the artificial intelligence (AI) era. If you don't know anything about AI, here's the most important thing you should know – it consumes far more electricity than any other digital activity. AI is a power-hungry monster.
Something Has to Give
Our collective ability to consume electricity outweighs our ability to produce it. That's why we are now at a crossroads. Big Tech is pushing forward with AI full steam ahead. There is no end in sight thanks to a virtual arms race that will ultimately determine who dominates the AI field. But where will all the power come from?
Something has to give. We either need to rapidly increase power generation or to limit the amount of energy we allow data centers to consume. The best solutions probably exist somewhere between the two extremes. But we can't wait to find the perfect solution. The system is in trouble right now.
While we stand at the crossroads, Google has stepped up as the first Big Tech player willing to do something. The company just signed deals with two utilities that will see them proactively reduce data center power consumption when demand across the rest of the grid reaches a certain threshold. Google signed the agreements in response to the increased demands of their AI technology.
The Future Isn't on Hold
The future of power generation and consumption is not on hold. Every day we wake up is another day into the future we move. This reality underpins the importance of getting to work on increasing power generation capacity now.
The time for discussions is over. If we wait much longer to aggressively pursue increased capacity, we could find ourselves in a situation of simply running out of power.
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